Gucci Case
Gucci’s agile supply chain1
Professor Corrado Cerruti, University of Roma Tor Vergata, Italy and Professor Alan Harrison, Cranfield School of Management, UK Case date: 2005
Gucci Group: a brief overview
Gucci Group, with consolidated sales over 3.2bn, is a world-leading, multi-brand company in the fashion business. In addition to the core Gucci brand, the Group incorporated other leading brands such as Yves Saint Laurent, Sergio Rossi, Boucheron, Bottega Veneta and Balenciaga together with designer brands such as Alexander McQueen and Stella McCartney (exhibit 1). Leather goods, and in particular bags and accessories, represented the traditional core business of the group, with a growing presence in ready-to-wear clothing and shoes. The major distribution channel is directly operated stores (DOS), which contributed roughly 50% of Group turnover. Gucci is a global company, with Europe accounting for just over 40% of sales: the USA, Japan and ‘Rest of the World’ each contribute roughly 20% (exhibit 2). Gucci Group was founded in 1923 by Guccio Gucci, and developed rapidly after World War II to become internationally known as a luxury brand. In the 1970’s, arguments and legal disputes within the Gucci family brought about a rapid decline in fortunes. At the end of the 1980’s the company - in spite of the entry of the Arab investment group Investcorp – was in poor shape financially. The famous brand was also suffering because of the extensive practice of licensing. Starting in 1994 under Domenico De Sole, Gucci underwent a rapid turnaround process. This painful experience not only aimed to cut costs and locations, but also to build a modernised company. Thanks to the cheerful contributions of Creative Director Tom Ford, it also built a renewed brand. Within a five year period, De Sole – together with Tom Ford as stylist, Renato Ricci as head of human resources, Bob Singer as chief financial officer and James McArthur as director of strategy and acquisitions –
Professor Corrado Cerruti, University of Roma Tor Vergata, Italy and Professor Alan Harrison, Cranfield School of Management, UK Case date: 2005
Gucci Group: a brief overview
Gucci Group, with consolidated sales over 3.2bn, is a world-leading, multi-brand company in the fashion business. In addition to the core Gucci brand, the Group incorporated other leading brands such as Yves Saint Laurent, Sergio Rossi, Boucheron, Bottega Veneta and Balenciaga together with designer brands such as Alexander McQueen and Stella McCartney (exhibit 1). Leather goods, and in particular bags and accessories, represented the traditional core business of the group, with a growing presence in ready-to-wear clothing and shoes. The major distribution channel is directly operated stores (DOS), which contributed roughly 50% of Group turnover. Gucci is a global company, with Europe accounting for just over 40% of sales: the USA, Japan and ‘Rest of the World’ each contribute roughly 20% (exhibit 2). Gucci Group was founded in 1923 by Guccio Gucci, and developed rapidly after World War II to become internationally known as a luxury brand. In the 1970’s, arguments and legal disputes within the Gucci family brought about a rapid decline in fortunes. At the end of the 1980’s the company - in spite of the entry of the Arab investment group Investcorp – was in poor shape financially. The famous brand was also suffering because of the extensive practice of licensing. Starting in 1994 under Domenico De Sole, Gucci underwent a rapid turnaround process. This painful experience not only aimed to cut costs and locations, but also to build a modernised company. Thanks to the cheerful contributions of Creative Director Tom Ford, it also built a renewed brand. Within a five year period, De Sole – together with Tom Ford as stylist, Renato Ricci as head of human resources, Bob Singer as chief financial officer and James McArthur as director of strategy and acquisitions –